May Sales Rise with Temperature
UK retail sales values were up 1.3% on a like-for-like basis from May 2011, when they were down 2.1% on a year ago. On a total basis, sales were up 3.4%, against a 0.3% decline in May 2011.
Miserable weather at the start of the month turned to glorious sunshine which boosted sales of food and drink, clothing and footwear to turn around what could have been a dismal May.
Food sales rose modestly from their year-earlier level, helped by sunny weather boosting seasonal produce. Big-ticket items continued to struggle as consumers’ underlying caution about jobs and the economy restrained larger big-ticket purchases.
Online (including mail-order and phone) sales of non-food items showed stronger growth, up 12.4% against growth of 10.4% last year. Sales growth returned to levels more consistent with the 12-month average
Stephen Robertson, Director General, British Retail Consortium, said: “As the relentlessly difficult underlying conditions continue to make trading tough for retailers, any temporary boost is of even greater importance and retailers had plenty of reason to celebrate the eventual arrival of summer at the end of May. Much of the month’s positive performance can be attributed to spending in the final week when consumers responded enthusiastically to the sun coming out.
“It’s likely the prolonged wet period helped create pent-up demand and people also felt more relaxed about their spending as the sun created a feelgood boost. Small numbers of customers buying jeans and knitwear in the first weeks of May became many more people purchasing skirts, shorts and swimwear by the end of the month. Womenswear had its best growth this year, while garden centres enjoyed a boom in the number of people investing in new lawnmowers to tackle overgrown grass.
“The performance of food retailers was more consistent across the month but again there was a marked change in the type of products customers were buying. Retailers will be hoping the boost continues, sustained by this summer’s celebrations and sporting events.”
Helen Dickinson, Head of Retail, KPMG, said: “Retailers are hoping that the Jubilee celebrations will have helped to pull out them of the mire, but a short-term patriotic spending spree will not overcome the underlying difficulties facing the industry – which remains under pressure from a combination of declining consumer confidence and squeezed incomes.
“After a dismal April, May was a much better month and many retailers will be breathing a small sigh of relief. No sector put in a star performance, but a focus on spending on children was evident and childrenswear saw a double-digit uplift in sales. Businesses in the home-related sectors, where good weather runs counter to strong performance, found the going much tougher. Those not selling big-ticket home-related items are hoping the sun stays out all summer long.”
Food & Drink – Joanne Denney-Finch, Chief Executive, IGD, said: “The belated sunny weather helped May’s food and grocery sales end on a high. The intense competition between retailers offering petrol vouchers also helped attract people into stores. Food companies will be hoping for this momentum to continue into June as big national celebrations, such as the Jubilee, usually encourage people to splash out on food and drink. The unique coincidence of the Jubilee, Euro 2012 and the Olympics occurring back-to-back could engender a real sense of patriotism this summer and a boost for locally sourced products. Nearly half (47%) of shoppers already tell us that supporting local or British producers is important to them when choosing grocery products.”
Online (Non-Food) – Stephen Robertson, Director General, British Retail Consortium, said: “Online sales have returned to healthier growth after an unusually weak month in April, in part due to the timing of Easter. It’s back in line with the six-month average and higher than the 12-month rolling average. The feelgood sunshine boost saw strong sales of summer fashions as well as outdoor leisure and gardening gear. Consumers planning ahead for the Jubilee celebrations and other summer events are also likely to have made earlier purchases online than they would have through traditional channels.
“The sharpest growth continues to come from shopping happening via smart phones and other mobile devices. A number of retailers are encouraging smart phone use in their stores, which is feeding into this trend.”